Invesco Canada Ltd. on Wednesday announced the launch of PowerShares 1-5 Year Laddered All Government Bond Index ETF to help fixed-income investors cope with rising interest rates.

The fund aims to increase yield by selecting investment grade government bonds that offer a higher yield than traditional federal non-agency government issues, Invesco says in a news release.

The ETF seeks to replicate, to the extent reasonably possible and before fees and expenses, the performance of the FTSE TMX Canada 1-5 year all government laddered bond index, which consists of investment grade bonds issued by the Government of Canada, federal agencies, provinces and municipalities.

As a laddered portfolio, the ETF helps manage reinvestment risk by spreading out bond maturities.

“A rising rate environment can be challenging for investors — while yields may rise, the value of longer-term government bonds may fall,” says Christopher Doll, vice president, sales and strategy, PowerShares Canada, in a statement. “Shorter-term investment grade bonds tend to provide a measure of stability to a fixed income portfolio.”

The ETF, which features a management fee of 0.15%, began trading Wednesday on the Aequitas NEO Exchange.